I never really understood the salary cap and now I heard it changed. What exactly is the salary cap, the amount of money a team can have going out in one year? And the new number is $120million?

exactly... when teams add up all their players salary for the year , it can't be over 120 mill. thats why teams sometimes have to cut the guys thats due to make a large amount of money .
thats why players try to get as much as they can in "guaranteed money " , like holmes just did. even if the jets cuts him in the middle of this season , they'd still owe him 24 of the 50 million. whatever is left over after this years salary would count against the cap next year .

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